Australian Regulator Punishes Firm Over Advert Breach; Bans Former Financial Planner For Life

Tom Burroughes

13 March 2015

Australia’s financial regulator has fined a financial planning firm for breaking advertising rules.

Australian Financial Planning Solutions Pty Ltd, based in Victoria, was fined A$10,200 ($7,840) in penalties after the Australian Securities & Investment Commission issued an infringement notice for making false or misleading representations, ASIC said in a statement yesterday.

AFPS is an authorised representative of Charter Financial Planning Limited, an Australian financial services licensee and subsidiary of AMP Limited.

ASIC's concerns related to false or misleading representations made in an article titled Benefits of a self-managed super fund that appeared on AFPS's website between 22 July and 4 November 2014, the regulator said.

ASIC was concerned that the article contained misleading and unsubstantiated claims that major retail and industry superannuation funds will experience payout difficulties, and the article misrepresented the taxation implications of self-managed superannuation funds (SMSFs) compared to major retail and industry superannuation funds, by giving the impression that certain tax benefits only apply to SMSFs, when they actually apply to most superannuation funds.

AFPS has removed the statements from its website following ASIC's concerns, ASIC added.

Banned for life
In an entirely separate case, the regulator has slapped a life ban on a former financial advisor called Lewis Fellowes from providing such services. He was banned after ASIC said it found he had engaged in dishonest conduct and in misleading or deceptive conduct in relation to six clients over the July 2008 to July 2010 period.

Fellowes transferred more than A$480,000 of client funds from their margin lending accounts into his personal account and that of his wife without the knowledge or authorisation of those clients. Fellowes also transferred $1 million from a client's bank account to his own, the regulator said in a statement.

The man provided financial advice from 1995 until 2009 in Gladstone, Queensland. In 2010 he moved to Perth and continued to provide financial services.

“This is an example of ASIC cracking down on inappropriate behaviour by financial advisors,” ASIC commissioner John Price said.

Fellowes has the right to appeal to the Administrative Appeals Tribunal for review of ASIC’s decision.